2002 report child care funding task force


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2002 report child care funding task force

  1. 1. Report of the OregonTask Force onFinancing QualityChild Care Oregon Commission for Child Care 2002
  2. 2. AcknowledgmentsOregon’s 71st Legislative Assembly passed HB 3659 in 2001 directing theOregon Commission for Child Care to create a Task Force on FinancingQuality Child Care. This report is submitted in fulfillment of the requirementsof HB 3659. It contains recommendations that require action from the OregonLegislature, state agencies, businesses, and other community partners. Thetask force final recommendations provide the foundation for a strategic planto guide the continuing development and financing of a quality child caresystem in Oregon.About this ReportThis report is published by the Oregon Commission for Child Care. TheCommission for Child Care is located within the Oregon EmploymentDepartment to address the issues, problems and alternative solutions that arecritical to the development of accessible, affordable and quality child careservices. Fifteen voting members are appointed to three-year terms asvolunteers by the Governor, President of the Senate and Speaker of the House.Members represent child care consumers, child care providers, business, labor,not-for-profit sector, state and local government, medical and legal professions,and the public at large. Three non-voting members are representatives of theOregon Legislative Assembly who are appointed to two-year terms by thePresident of the Senate and the Speaker of the House. 1
  3. 3. Task Force Members Bob Repine, Salem, Oregon Housing and Community ServicesKitty Piercy, Eugene, Task Force Chair and Chair, John Sandusky, Tillamook, Care, Inc.* Commission for Child Care* Renee Sherman-Krause, Eugene, Parent*Michael Buonocore, Portland, Housing Authority of Portland Tom Thorburn, Roseburg, Ford Family FoundationCraig Campbell, Salem, Chair, Oregon Commission Lisa Trussell, Salem, Associated Oregon Industries on Children and Families David W. Willis, M.D., Portland, Northwest EarlyBev Clarno, Bend, Oregon State Senate* Childhood Center, Emanuel HospitalKathy Criswell, Portland, Providence Health Systems Martha Young, Roseburg, Cow Creek Umpqua Indian FoundationJo Rymer Culver, Portland, PRO TEM Professional Staffing Services Expert ConsultantsJohn DeGroat, Estacada, Learning Tree Inc.*Gun Denhart, Portland, Hanna Andersson, Inc. Arthur C. Emlen, Ph.D., Professor Emeritus, Portland State UniversityGabriella Downey, Portland, American Federation of State, County, Municipal Employees* Suzanne Helburn, Professor Emeritus, Colorado State UniversityArt Emlen, Portland, Professor Emeritus, Portland State University Anne Walsh Mitchell, M.S., President, Early Childhood Policy ResearchRandy Franke, Salem, Marion County Board of Commissioners Louis Stoney, Early Childhood Policy Specialist, Stoney AssociatesCarla D. Harris, Portland, Legacy Health Systems Billie Young, Manager, Northwest Finance CircleRandy Hilderbrand, Salem, Chief of Staff, Senator ClarnoCynthia Hurkes, Roseburg, Douglas County Child Care Work Group Members Resource & Referral*Robi Ingram-Rich, Portland, Oregon Health Sciences Joann Contini, Center for Career Development in University* Childhood Care and EducationJudie Johnson, Salem, Department of Human Services* Dell Ford, Head Start Collaboration Project, Department of EducationMichael Jordan, Lake Oswego, Clackamas County Office for Children and Families, Oregon Progress Board Marian Smith, Benton County Commission on Children and FamiliesRobin Karr-Morse, Portland, Family Therapist and Author Mary Nemmers, Oregon Child Care Resource & Referral NetworkLisa Kopetski, Pendleton, Child Care Group Home Provider* Janelle Nesbit, Oregon Commission for Child Care (staff)Heidi McGowan, Corvallis, Stand for Children Tom Olsen, Child Care DivisionToni McKissen, Portland, Small Business Association Rosetta Wangerin, Department of Human ServicesJoanne Miksis, Eugene, Oregon Commission on Children Bobbie Weber, Oregon Child Care Research Partnership, and Families Family Policy Program, Oregon State UniversityLaurie Monnes-Anderson, Gresham, Oregon House JaNell Welker, Oregon Commission on Children of Representatives* and FamiliesKim Parker, Canby, Habitat for Humanity* *Members, Oregon Commission for Child Care2
  4. 4. PrefaceLegislative Charge of the Task ForceOregon’s 71st Legislative Assembly passed HB 3659 in 2001 direct-ing the Oregon Commission for Child Care to create a Task Force onFinancing Quality Child Care. The charge of the task force includedthe following:s Gather information about the availability of quality child care in this states Develop recommendations about how quality child care should fit within the voluntary statewide early childhood system created under ORS 417.728, (formerly 417.748)s Develop recommendations about how to provide financial support for quality child cares Develop recommendations on long-term planning to provide quality child care statewide as driven by local community needsIn addition to the specific duties listed above, the task force wasdirected to report its findings and recommendations to the Commis-sion for Child Care and the interim legislative committees withresponsibility for matters relating to children and families. 3
  5. 5. In accordance with HB 3659, the Oregon Commission for Child Care convened a Task Force on Financing Quality Child Care. The task force consisted of thirty-one members representing the Oregon Legislature, state and local government, business, foundations, education, the child care field, and citizens. The task force met five times during 2002: March 5, April 5, April 26, May 10, and May 29. During that time several distinguished na- tional and state experts met with the task force to offer the most current thinking about child care quality and financing. (A brief review of expert testimony is included in Appendix A.) The history and progress of Oregon’s efforts relating to all aspects of child care were reviewed, along with national literature relating to brain development, early learning, and child care systems and financing. Fifteen recommendations were jointly developed and approved by the task force. Recommendations are represented here with respect to the availability of quality child care, child care in Oregon’s early childhood system, the financing of quality child care, and long-term planning for statewide quality child care.4
  6. 6. PreambleThe first three years of life are a crucial period in a child’s life, and during this period achild is sensitive to the protective mechanisms of parental and family support. HouseBill 3659, Section 2 (1)Why Quality Child Care MattersChild care is an issue of vital public interest. Parents of young The developmental effects of child care depend on itschildren are in the labor force in record numbers, and children arespending large portions of their early years in the care of others safety, the opportunities it provides for nurturing andbesides their parents. With the explosion of knowledge about brain stable relationships, and its provision of a linguisticallydevelopment in infants and young children, the relationship be- and cognitively rich environment. Yet the child caretween the quality of child care and outcomes for children is of that is available in the United States today is highlyincreasing interest to parents, researchers and policymakers. fragmented and characterized by marked variation inNeuroscience research reveals that a child’s early years are crucialfor normal physiological, emotional, sociological, and psychological quality, ranging from rich, growth-promoting experi-growth and development. These developmental areas are directly ences to unstimulating, highly unstable, and sometimesrelated to the child’s preparation for a successful life. dangerous settings. The burden of poor quality andSince many children have their first prolonged out-of-home experi- limited choice rests most heavily on low-income,ence in a child care setting, child care should offer opportunities for working families whose financial resources are too highpositive early brain development that are essential to the ability tolearn, succeed in school, and become happy, productive adults. Just to qualify for subsidies yet too low to afford quality care.as early intervention and prevention programs are integral parts of Neurons to Neighborhoods: The Science of Early Childhoodchildren’s education, high quality child care must be similarly Development, National Research Councilacknowledged as a key component in the lives of children and and Institute of Medicinefamilies, and increasingly, as necessary for economic stability.Investment in child care is an investment in young minds and agrowing economy.Raising children has always been a critical component of theeconomy. Even before women became a significant part of theworkforce, their generally unpaid care of children enabled men toengage in wage-producing jobs. Child care formed the essential 5
  7. 7. basis for young Americans to become productive participants in the economy. Over time, the child care sector has become a formal part of the economy. Caregivers are paid wages and, in turn, pay taxes, and significant investments are made in associated buildings and supplies. Today, child care provides an essential infrastructure which enables mothers and fathers to be employed outside the home and earn necessary income. Affordable, accessible quality child care is essential to economic prosperity. Currently, in the majority of families — even those with very young children — the mother isGreater investments in early childhood would not only benefit children in the paid labor force. And, an increasing proportion of mothers are the sole or primarybut also save the government money in the form of lower welfare financial supporters of their children, eitherpayments, higher tax revenues, and lower criminal justice through divorce or never having married. Forsystem costs. most families, staying home with their young children is not an option. Most often, both Investing in Our Children: What We Know and Don’t Know About the parents must work to provide food and shelter Costs and Benefits of Early Childhood Interventions, Karoly, Greenwood, for their families. Federal and state policies Everingham, Houbé, Kilburn, Rydell, Sanders, Chiesa, Rand mandate that parents on public assistance must Corporation, 1998. work, and may require the presence of both parents in the workplace, and thus, the man- dated need for child care for these families. In addition, families require respite or specialized care in order to cope with the demands of raising their children with special needs. As a result, the majority of our children are spending large portions of their developing years in out-of-home care. The fact that care may be in short supply or not of good enough quality are concerns that impact all other sectors of our society — not just parents. 6
  8. 8. How can we ensure that our children arereceiving high quality care? High quality The time is long overdue for society tomeans children are actively engaged and recognize the significance of out-of-homelearning under the care and guidance of a relationships for young children, to esteemwarm and nurturing caregiver who hasthe knowledge and skills to support those who care for them when their parents aretheir development. not available, and compensate them adequatelyThrough our child care resource and referral as a means of supporting stability and qualitynetwork and other sources for public infor- in these relationships for all children, regard-mation, we can inform and educate parents less of their family’s income and irrespective ofabout the importance of purchasing qualitychild care for their children. We can develop their developmental needs. Neurons totools to help parents identify quality care. Neighborhoods: The Science of EarlyHowever, the quality of care that is funda- Childhood Development, National Researchmental to the well being of children is too Council and Institute of Medicineexpensive for many families to purchase,including families who purchase care withthe help of a state child care voucher.Caring for the very young is one of our most important responsibili-ties. Research indicates that consistent early care by an educatedteacher is fundamental to quality early education, and qualityexperiences lead to readiness of our youngest children.Yet, most child care workers receive minimal training, and due tochronically low wages, many providers cannot afford to stay in theprofession. Few can invest in the training needed for high qualitycare. Some child care providers make such low wages that theyqualify for the Oregon Health Plan, and others are the workingpoor who cannot afford any health care coverage for themselves andtheir families. One of the rare exceptions in Oregon is Head Start, aprogram that provides high quality care for low-income familiesand pays its staff respectable wages. We must develop models ofprivate/public partnerships that support increased wages andbenefits for child care providers. 7
  9. 9. The availability of quality, affordable child care impacts employers. The high attrition rate in child care employment results in loss of wages for parents who miss work to find new care. This can jeopar- dize their jobs and cause disruption for employers. No employers like to lose the investments they have made in training their employees. In this report, we propose ways to support families and employers through family-friendly business practices and the reduction of unexpected absences from the worksite. We propose working with businesses to find sensible ways to support quality child care for their employees. We look to the business community for ideas that will benefit both employees and employers and invest those same business leaders in helping our children be better prepared to enter school. The task force also found that there is an economic rationale for supporting the success of child care programs and their providers. These small- and medium-sized businesses are locally based and would invest their compensation back into the communities in which they live. Looking at the business investment perspective is worth serious economic and workforce study. State leaders have begun to build a system of care for Oregon children. This system began with communities mapping current services, gaps and barriers, and then selecting proven strategies to improve the system. One such strategic program is Healthy Start, which provides a voluntary method of identifying at-risk families and offering them access to services to improve parenting skills and abilities. Another strategic program is the crisis relief nursery that provides an important and successful adjunct to support families that struggle with parenting. The state must make high quality child care a keystone of systems planning for services for children and their families. The aforementioned programs are necessary supports for Oregon children and families; however, a critical link has been frequently overlooked or underrated. Between those early childhood preven-8
  10. 10. tion and intervention programs and the beginning of the school years isanother obvious opportunity, if available, to prepare children for school,but if unavailable, can keep a child unprepared for what lies ahead. Thisopportunity is high quality child care.This report describes the fragmented system of child care that currentlyexists in Oregon. It describes how the system must be strengthenedthrough the adoption of quality standards and the acquisition of essen-tial data. It describes how the fragments must be coherently built into asystem that is recognized and supported by our state and its public andprivate partners. The report proposes ways Oregon can build on currentlegislation to acknowledge the critical role of child care and to begin toensure its place in the state planning processes for child wellness andearly education. Finally, it proposes a number of strategies for consider-ation that could help finance quality child care.The Task Force on Financing Quality Child Care concludes that theavailability of high quality child care for all families is important for thefuture of Oregon. It is a bold vision of the direction we must take tosecure a healthy future for our children and their families. We can dono less. The Members of the Oregon Task Force on Financing Quality Child Care 9
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  12. 12. I. Availability of Quality Child Care in OregonNational studies have found that 65 percent of child care arrangements of youngchildren are fair to poor. Although there is no reason to expect Oregon child care to bemarkedly better, it is essential to know the level of quality in our state, and at thistime we do not.Measuring the Quality of Available Number of Oregonians age 13 and under 605,495Child Care Children age 13 and under with one orOregon has been measuring the affordability and availability of both parents in the workforce 55%child care since 1990 when the Oregon Progress Board adopted childcare benchmarks. According to biennial data available from the Oregon children under 13 in paid care 27%Oregon Childhood Care and Education Data Project, child care is Oregon children under 5 in paid care 34%not affordable for 65% of families who earn below the medianincome, and that the amount of child care available varies widely Oregon families with children underacross Oregon counties. Child care is most available in counties in 13 using paid care 32%which family incomes and education levels are high. Oregon families with incomes belowThe current benchmark measures tell us nothing about the quality the median for whom childof available slots or the types of care that are in short supply. Mea- care is affordable* 35%suring the quality of available child care is more difficult thanassessing the supply of affordable child care in a community. Fig. 1: Who uses child care in Oregon?There is a significant body of research literature and a high level of Source: Oregon Child Care Research Partnership 2002consensus on the characteristics of quality child care. In discussions *Affordability means that on the average, families spend less thanabout child care, quality is the term used to describe care that one-tenth of their household income on child care.research has shown to be associated with positive child outcomes:school readiness, higher language and cognitive functioning,social skills and emotional well being. The Oregon Head StartCollaboration Project has produced a detailed description of quality,“Essential Elements of Programs for Children.” This work cites ninefundamental components that characterize high quality earlylearning programs. 11
  13. 13. Research has established that the major components of quality careTask Force Recommendations are warm, nurturing teacher behavior, the richness of the environ- ment, and age-appropriate, stimulating activities. These characteris- tics are also highly correlated with structural factors: group size, adult-to-child ratio, and the education level of the teacher or1. Develop the ability to measure and evaluate the caregiver. Other characteristics associated with quality are low quality of child care statewide. teacher turnover rate, higher compensation of teachers and provid- The Oregon Child Care Research Partnership should ers, and the absence of substantiated complaints. be commissioned to develop and pilot the measure- The first challenge in measuring quality is deciding what to ment and reporting of quality indicators in child care measure. Researchers are examining such questions as how to define arrangements. On the basis of the pilot, a statewide the elements that correspond to quality child care, how to measure system would be implemented to measure and those elements, and ultimately, their effects on children both in the report quality levels to parents, employers, and other short- and long-term. We must also consider ways in which to decision-makers using strategies such as a star communicate the results of quality measurement to parents and system or reports of quality indicators. The Oregon other decision-makers. Progress Board will be asked to adopt a quality child care benchmark. To gather information about the availability of quality child care requires the implementation of a strategy to measure quality. We2. Use solid data to drive the planning process for must also determine the actual cost of a high quality child care child care investments. system with access for all families. The Oregon Child Care Research Partnership should Therefore the Task Force on Financing Quality Child Care recom- continue to measure and report on the supply of mends piloting a quality-measurement initiative. The first step is market child care, including the child care that is to establish a measurable definition of quality. The next step is to exempt from state regulation. A model should be implement methods of quality measurement statewide and finally, developed to determine the cost and the investment to create a quality child care benchmark. needed for broad access to a high quality child care The task force considered the role of child care regulation in the system that prepares children for success. availability of quality child care. Licensing is the level of standards below which child care businesses are not allowed to operate. The Oregon Legislature sets these standards. Oregon, as does every state, exempts certain types of care from licensing. Oregon exempts centers that operate for four hours or less per day and programs that are operated by government agencies such as colleges, universities and public schools. 12
  14. 14. The issue is not that we know the quality of exempt care to be low orbad for children. Rather, the issue is that we know nothing about Definitionsexempt care. Families do not have the protection provided for carein regulated facilities where the state monitors to ensure that care Family Child Care Provider:meets minimal standards. Care is typically provided in a private home for more than one Just as in many other fields, some family’s children. A registered family child care provider can consumers and policy makers care for up to 10 children in Oregon, including her own Oregon’s Professional children. want to be able to identify a level Development Registry is of quality that is higher than the Child Care Centers: located within Oregon requirements of state licensing Programs that provide care and education for a group of Childhood Care and regulations. Centers are accred- young children in a formal setting outside of a home, includ- ited through the National Asso- Education Career ciation of Education of Young ing all for-profit or not-for-profit programs, public and private Development Center, preschools, Head Start programs, religion-based programs, Children (NAEYC), and family and child and family development programs. Portland State University. home providers are accredited through the National Association Child Development Associate (CDA): of Family Child Care (NAFCC). A credential equivalent to 15 hours of college credit in theBoth processes consist of self-study and validation by a team of field of early childhood care and education. The CDA isprofessional evaluators and final approval by the accrediting body. considered as entry level certification for professionals.Facilities must meet rigorous standards for physical space, curricu-lum content and teacher and/or administrator qualifications. Certified Child Care Center:Accreditation standards are considered more stringent than A business caring for more than 14 children in a facilitylicensing standards. designed for that purpose that meets the health and safety standards set by the Child Care Division. Facilities are in- spected for fire safety and sanitation, and staff-to-child ratios and administrator qualification levels must be met. Exempt Care: A person or organization not subject to state child care regula- tion that establishes staff-to-child ratios or staff training and qualifications. These include providers caring for three or fewer children or children from only one family; programs operated by school districts and colleges; care provided in the home of the child or by a relative; and limited duration pro- grams such as summer youth camps. 13
  15. 15. Forty-eight of approximately 1,400 Oregon child care centers (950 Task Force Recommendations of which are state-regulated) are accredited. Fewer than 10 Oregon family child care providers are accredited. In our state there is little,3. Use workforce training and compensation mechanisms to if any, reward for pursuing accreditation. In states in which facili- develop a child care workforce that is better able to tates receive public payments for being accredited, the numbers of provide quality care. accredited facilities is higher. a) Apply the Workforce Investment Act to the child care Accreditation is granted to facilities. Individuals who are teachers workforce to improve training levels and reduce turnover. or caregivers have a number of ways to document competency and earn credentials. They must complete basic training required by the b) Continue outreach to the child care workforce on available Child Care Division if they work in a regulated facility. They can insurance options including the Oregon Health Plan and enroll in the Professional Development Registry and document their state insurance pool. level of competency. They can complete the Child Development Associate Credential (CDA), a nationally recognized competency-4. Utilize program and tax expenditures to improve the based credential. They can earn a one-year certificate, an associate, quality of available child care: bachelor or graduate degree in Early Childhood Education or a a) The Department of Human Services should pay higher related field from a college or university. Some family child care rates for state-subsidized child care that is of documented providers choose to earn a CDA rather than become accredited. higher quality and/or provided by accredited providers. Ninety of the estimated 7,800 Oregon family child care providers have earned their CDA. b) Revise the Oregon employer dependent care tax credit to offer larger credits for expenditures on documented qual- To encourage more child care providers and facilities to voluntarily ity child care arrangements. exceed basic standards of health and safety, the task force offers recommendations that address training and compensation of the c) Create a tax credit for members of the child care workforce child care workforce as well as ways in which existing tax credits based on their level within the state’s professional devel- and the child care subsidy for low-income families can be applied opment registry. as greater incentives for quality improvement. d)Revise the parent tax credit so that the amounts of credits are linked to levels of quality among child care providers. e) Create a fund to help with child care accreditation fees. f) Increase the amount of care that is subject to regulation by eliminating the current exemptions of child care facilities that are operated by colleges, universities and public schools. 14
  16. 16. II. Improving Child Care Quality throughCollaborationIt is a bold vision that puts child care at the center of community services forfamilies to secure a future for our children. To do less is to neglect Oregon’syoungest and most vulnerable citizens; to do more promises generations ofhealthier and more able Oregonians.Improving Child Care Quality throughCollaborationOregon is sometimes dubbed a laboratory of reform and makerof national trends. We’re proud of our accomplishments to makeOregon a better place to live and work. Among these are the OregonHealth Plan, which affords greater access to health care by low-income Oregonians – particularly pregnant women and youngchildren – and the Oregon Benchmarks, which quantify the state’scollective goals for the health and well being of all Oregonians. Inkeeping with these traditions, Oregon has created a locally basedsystem of planning for early childhood and other services forchildren and families.The vast majority of families with young children voluntarily usechild care while they work outside the home. Given that this systemserves the majority of children on an ongoing basis, it is essentialthat child care is integrated within Oregon’s early childhood plan-ning. The task force offered the following recommendations tostrengthen and broaden the collaboration already underway inOregon communities. 15
  17. 17. Task Force Recommendations5. Amend Oregon statutes to include child care as a central g) Work collaboratively with the Commission for Child Care part of the collaborative, coordinated, comprehensive to use the data collected by the local commissions in the system of care for Oregon’s children and families: development of the state’s child care plan. a) Add quality child care [417.305 (2)] and high quality child h) Add the child care resource and referral network as part- care as defined by the Child Care Commission [417.728 (D)]. ners in developing local comprehensive plans as well as the early childhood plan. b) Add the Employment Department as an agency that estab- lishes the policies that shall be incorporated into the local 6. Recommend that the Commission for Child Care engage coordinated comprehensive plan [417.728 (1)]. the business community, higher education and others as c) Add the Child Care Division of the Employment Depart- partners in the development of united advocacy and ment to jointly identify the appropriate early childhood planning for a quality child care system: benchmarks and intermediate outcomes. [417.728 {2} (a) & (b)]. a) Support united advocacy for child care. d)Add the Employment Department as an agency that will b) Work with the county commissions on children and fami- consolidate administrative functions relating to training and lies to create a stronger voice for early childhood at the technical assistance, planning and budgeting. [417.728 (4) local level and in all levels of planning. (a) (b) (c) (f) (g) & (5)]. c) Ensure that child care is represented all through the con-In addition to integrating child care into the state’s early child- tinuum of the early childhood system.hood planning through statutory changes, the two state Com- d)Build a system together instead of competing for resources.missions can strengthen integration through increased collabora- e) Actively involve the business sector.tion. f) Actively involve and link higher education with its train- e) Add either the Chair of the Commission For Child Care or ing and knowledge of research-based programs and best the Director of the Employment Department to the State practices with child care. Commission on Children and Families. g) Continue to support the prevention of child abuse through- f) Add the Child Care Division of the Employment Depart- out the child care system. ment as an agency that reviews the findings from the data collected by the local commissions through the local com- h) Ensure mental health and public health planning are an prehensive plans. integral part of planning the child care system. 16
  18. 18. Currently, there are significant gaps in child care services forchildren with special needs. Parents of children with disabilitieshave difficulty finding stable child care arrangements. They alsoreport lower levels of quality in their care arrangements. To addressthis gap, Oregon has launched several successful programs to trainproviders to care for children with higher-level needs including astatewide mentoring project and some local child care consultationprojects. However, family and provider access to these types ofsupports is limited. At this time, neither training nor consultation isavailable on a consistent, statewide basis.Child care settings also provide the opportunity for the early identi-fication of children’s behavioral and mental health issues. Child careteachers and providers should be trained to fully support the devel-opment of positive assets of a child and to recognize and referchildren and their families to appropriate services. This is amplereason for engaging mental health and health care professionals inchild care planning. Through increased collaboration at the state andlocal levels, mental health and child care professionals can identifystrategies to improve the availability of providers who are knowl-edgeable about caring for children with special needs.In addition, cultural competency of child care providers is a growingconcern. As Oregon’s population becomes more diverse, the influ-ence of language and culture within child care settings takes ongreater significance. There is a growing need for well-trained childcare providers who share the same language and culture of thechildren in their care.Through collaboration — particularly with organizations and inter-ests that may be considered nontraditional partners for child careprofessionals — the task force saw an opportunity to address theseand other gaps to improve the quality of child care. 17
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  20. 20. III. Child Care FinancingNinety-five percent of public investment in education occurs after the age of five, eventhough 85 percent of a person’s intellect, personality and social skills are developed byage five.Strategies for Financing Quality Child Care Total Oregon Child Care ExpendituresChild care is a market composed of providers who most often $593,359,510operate as small for-profit or not-for-profit businesses. Economistsdescribe child care as a case of market failure — a market which lefton its own, neither efficiently nor effectively delivers services. Government Business &Researchers consistently find that the quality of child care is not Tax Expenditures Philanthropyhigh enough to produce positive developmental outcomes for Programschildren. Yet, costs are already higher than the majority of low andmiddle-income families can afford. Child care is affordable for only35% of Oregon families with below-median income.The most recent Oregon figures indicate that families pay morethan 66 percent of the cost of care. The private sector — includingemployers and foundations — contribute less than one percent. Therest is made up of federal, state and local government through taxcredits and subsidies for low-income families. Low-income Oregonfamilies spend about a quarter of their household income on childcare. Single parents spend closer to one-third of their income onchild care. FamilyFig 2:Who Pays for Child Care in Oregon? Source: Oregon Child Care Research Partnership based on statefiscal year 2001 19
  21. 21. Adequate and stable funding is needed for greater access to quality Task Force Recommendations care, to provide consumer education to parents, for training the child care workforce, and to encourage and assist employers in addressing child care needs of employees.7. Improve Oregonians’ ability to locate and make Oregon’s child care affordability benchmark is based on the goal informed decisions about quality child care: that families spend less than 10% of household income on child care. a) Fully fund the child care resource and referral (R&R) Currently, poor families spend almost the same amount for child system. Introduce legislation to reduce the 100% match care as their higher income counterparts. Yet, poor families spend requirement. a much greater percentage of their family income on child care. b) Strengthen the capacity of R&Rs to assist families, Low-income families receiving child care subsidies and who are providers, employers and communities. responsible for co-payments spend on average 15% of their house- c) Fully fund the child care career development system hold income on child care. The amount that these low-income including the Professional Development Registry (PDR). families must spend on child care is even higher because the maxi- mum amount paid in the subsidy program is equal to or greaterThe task force found that existing tax and program expendi- than the price of only 24% of the slots in the child care market inture options are not fully utilized. Oregon.8. Explore the full use of existing funding streams to Congress envisioned families having access to 75% of child care slots in their communities. In contrast, Oregon families receiving improve the quality of care: the subsidy can access only approximately one-quarter of available a) Identify and remove barriers to full usage of existing child care. The combination of the parents’ co-payments and the child care tax credits by parents and employers. voucher value falls too short to purchase most of the care that is b) Allocate new Title I funds to expand early care and available in their communities. education. Employment is a necessity for single parents and lower-income c) Direct that Community Reinvestment Bank Act funds two-parent households. Currently, in a majority of Oregon families be used for a micro-loan program for early care and with children — even those with very young children — the mother education. is in the paid labor force. And, there is an increasing proportion of mothers who are the sole or primary financial supporters of their d)Review non-child care tax credits for child care funding children, either because of divorce or because they never married. opportunities. 20
  22. 22. The type of child care arrangements used by families while themother works varies depending on the age of the child, as well as Task Force Recommendationsthe mother’s work schedule (full-time or part-time), marital statusand family income. Flexible and supportive workplace policies and 9. Explore the creation of new revenue streams to pilotpractices by employers can positively impact the quality of care that new ways of financing child care:children receive. a) Explore the feasibility of a statewide real estate transferAccording to Work and Family Connection, Inc., a national clearing- tax (.5 of 1% of sale) and direct revenue to addresshouse on work-life research, during the past two decades, more affordable living needs of low-income families: housing,employers are reporting that helping employees with child care and food, and child care.other work-life policies positively impact their businesses throughreduced absenteeism and turnover and increased employee produc- b) Explore the institution of a tax on gourmet coffee andtivity and commitment. Despite the fact that businesses derive great direct revenue to children.benefits when employees have high quality child care for their c) Create a marketing campaign to encourage parents andchildren, relatively few employers are investing in child care as an employers to use dependent care and other child careemployee benefit. tax credits.The task force acknowledged the need to better inform Oregon d)Pilot a financial aid system for all families that is mod-employers about existing tax credits that offer incentives to invest in eled on the financial aid system for higher education,programs to help employees with child care. Currently, a state tax using public and private dollars so that families pay lesscredit refunds 50 percent of employers’ investments ($2,500 maxi- than 10% of household income on child care.mum per employee per tax year) in these programs: offering childcare resource and referral services, paying a portion of child care 10. Improve the ability of low-income families to affordexpenses, subsidizing the operating costs of an employer-sponsored quality child care so that:child care center, or underwriting slots in a community child carefacility. In addition, a federal tax credit is available to assist employ- a) Families participating in the state child care subsidyers with the costs of building a child care center for employees, program pay less than 10% of household income asoffering child care resource and referral services, and a paying their share of their child care cost.employees a child care subsidy. b) State child care payment rates cover the full cost of 75% of the child care slots in a community so that families will not have to pay the difference between the provider’s usual charge and the state payment rate. 21
  23. 23. Task Force Recommendations11. Encourage businesses to explore the benefits of 13. Engage Oregon businesses as allies in supporting families employer-supported child care and flexible and and advocating for public support of child care: supportive workplaces: a) Support parents’ ability to stay home with their child after a) Ensure that parents have access to paid parental leave birth or adoption. after the birth or adoption of a child. b) Explore the use of the Unemployment Compensation funds b) Support employer policies that meet a parent’s need for for paid leave of parents. flexibility. c) Promote flexible parental leave policies including paid leave. c) Promote manageable shifts and work schedules. d)Explore feasibility of a tax credit for employers who offer paid parental leave. d)Encourage flexible work schedules so employees can better meet family needs. 14. Develop strategies to better inform all sectors of society e) Promote child care assistance as part of employee benefit about the benefits of high quality child care: packages. a) Ask the Child Care Information Partnership (collaboration f) Establish part-time jobs that offer full-time benefits. providing public information about quality child care) to enlist the support of business leaders to help other employers under-12: Expand the ability of Oregon child care resource and stand the importance of high quality child care to prepare referral programs to respond to family and employer children for success in school. needs: b) Recommend that the Commission for Child Care initiate a a) Learn from parents what kinds of help will have the campaign that is ongoing, made up of task force members to greatest impact. continue the momentum of the finance task force. b) Assist parents with work-family issues. c) Encourage the creation of a nonprofit organization whose mission is educating Oregonians about the need for and ben- c) Help employers assess and meet the work-family needs of efits of early care and education to prepare children for success their employees. in school. d)Join other states in advocacy for increased federal funding of early care and education. e) Link the work of legislative interim committees on Women in the Workforce and the federal Birth and Adoption Unemploy- ment Compensation Rule. 22
  24. 24. The task force recommended exploring other tax incentives foremployers to encourage child care investments for employees. Arecent national study indicates that on-site and near-site employer-supported child care centers are more likely to be of higher quality,maintaining greater staff-to-children ratios, accredited by NAEYC,and offering competitive salaries with benefits for child care teachersand staff.It is unlikely that Oregon will provide high enough quality childcare to meet the needs of its young children until Oregonians under-stand the costs and benefits of quality child care. Efforts are neededon the part of all stakeholders to ensure these outcomes are positive. The Role of Philanthropy in Child Care Funding Many U.S. foundations and philanthropic organizations provide important support for child care, early childhood development, preschool, and after-school programs in Oregon communities. Each organization has its own funding criteria and cycle for giving programs. Most provide grants within several categories: s Capital for construction or renovation of child care facilities; s Materials, supplies and curriculum purchases for early learning; s Training scholarships for child care providers; and s Special projects such as respite care or tuition assistance for children with special needs. Some organizations provide start-up funds for new child care programs or child care approaches. Yet, few fund the opera- tional needs of programs. Community-based organizations should explore the priorities of each foundation to assess the funding potential for their particular idea or initiative. 23
  25. 25. 24
  26. 26. IV. ConclusionCreate a practical model of a statewide quality child care system that serves all Oregonchildren and is responsive to local community needs— Mission statement of the Oregon Task Force on Financing Quality Child CareLong-Term Planning For Quality Child CareFrom existing child care data, we know that the availability ofaffordable child care varies widely across Oregon counties. Everycommunity must address child care needs in relation to thecommunity’s unique mix of strengths, resources, and geographicand demographic factors. And, to ensure that quality child care isavailable to families in every community throughout the state, childcare needs must be addressed within the context of an overallsystem. By system we mean more than child care facilities andprograms — we mean programs and the entire infrastructure thatsupport the provision of high quality early childhood care for allchildren.The challenge to finance such a system goes beyond just fundingthe day-to-day delivery of individual programs. There are manyprograms, services and funding streams that support early child-hood education in addition to parents’ fees. These remain largelyuncoordinated and under-funded, and opportunities for invest-ments from the private sector, to a large extent, remain untapped.To date, most of our public expenditures go to support directservices for children in families with low incomes. Even so, largepercentages of children who could benefit from publicly supportedprograms do not have access to them. For example, Head Startserves only about half of all eligible children, and federal child caresubsidies reach less than a fifth of eligible children. 25
  27. 27. Individually, the recommendations in this report are advanced to address these specific issues and conditions. Yet, when considering these recommendations as a comprehensive body of work, the recommendations take on the elements of a long-term plan to address the building blocks — the infrastructure — of an integrated system of early learning in Oregon: s Quality assurance for all child care settings — standards for personnel and programs, regulation Components of a High Quality and accreditation Childhood Care and Education System s Consumer information and referrals — provision of qualitative information to child care consumers for informed child care choices Health and Safety Child Care Resource Regulation and Referral s Professional development — incentives for train-Minimum standards for providers. Information for parents, ing, continuing education and accreditation of providers, employers and child care providers communities. s Employer assistance — help for assessing and addressing the child care needs of employees s Research — the information essential to planning, Quality Standards decision-making, and tracking and improvingProgram accreditation State and Quality Assessment Objective performance or other evidence of Local high standards. Staff Child Care measurement of child All of the experts who met with the task force empha-credentials, degrees, or Planning care quality using sized the importance of involving all stakeholders inother evidence of high and Policy research-based long-term solutions for financing a childhood care and skill. indicators. education system. Clearly, these components of quality early learning are beyond the ability of Oregon parents to finance on their own. And, the costs of children being Low-income Subsidy in mediocre or low quality care are too high for all Career Development Assistance for low-income Coordinated training, education, Oregonians. families working or preparing mentoring, and professional for employment. recognition for the child care workforce. 26
  28. 28. Research studies have established the rationale for public supportof early learning, and Oregon has many good early childhood Task Force Recommendationsprograms already in place. Broad-based collaborations are at workin Oregon communities engaged in local comprehensive planning 15. That Oregonians recognize and address child care asof early childhood services. Innovative business leaders are demon- fundamental and vital to Oregon’s future.strating the mutual benefits derived from employer-supported childcare and flexible, supportive workplaces. Yet, considerable workremains to be done to integrate and support these efforts as acohesive, early childhood system that provides the level of qualityessential to all children’s healthy development.Therefore, the final recommendation of the task force is offered tounderscore the importance of investing in a quality early childhoodsystem. The rationale became the strong, recurrent theme through-out the work of the task force – that quality child care matters onmany levels. It matters to young children in their most vulnerableyears, and to their parents who want the assurance that theirchildren are receiving the best care even when they cannot be withthem. It matters to employers who must rely on the best, mostproductive employees the workforce has to offer, and to electedofficials and other policymakers who are entrusted to make sound,cost-effective decisions. Quality child care matters to all Oregonianswho want the healthiest and safest communities in which to live,work and raise our families.The task force has identified critical issues that will need to beaddressed by state and local policymakers, state and local organiza-tions and agencies, and the business and nonprofit sectors. TheCommission for Child Care with its partners will carry theserecommendations forward as strategic plan to improve childcare in Oregon. 27
  29. 29. Summary of Task Force Recommendationss Develop the ability to measure and evaluate the quality of s Explore the full use of existing funding streams to improve the child care statewide. quality of care.s Use solid data on child care to drive the planning process s Explore the creation of new revenue streams to pilot new ways for child care investments. of financing child care.s Use program and tax expenditures to improve the quality s Improve the ability of low-income families to afford quality of available child care. child care.s Apply workforce training and compensation mechanisms s Encourage Oregon businesses to explore the benefits of em- to develop a child care workforce that is better able to ployer-sponsored child care and flexible and supportive work- provide quality care. places.s Amend Oregon statutes to include child care as a central s Expand the ability of Oregon’s child care resource and referral part of the collaborative, coordinated, comprehensive programs to respond to family, employer and community system of care for Oregon’s children and families. needs.s Engage the business community, higher education and s Engage Oregon businesses as allies in supporting families and others as partners in the advocacy and planning for a advocating for public support of child care. quality child care system. s Develop strategies to better inform all sectors of society abouts Improve Oregonians’ ability to locate and make informed the benefits of high quality child care. decisions about quality child care. s Recognize and address child care as fundamental and vital to Oregon’s future. 28
  30. 30. Appendix A:Expert Testimony Provided to Task Force on FinancingQuality Child CareThe following is a brief summary of expert testimony delivered to the Task Force onFinancing Quality Child Care. Full copies of testimony may be requested from theOregon Commission for Child Care.Helen Neville, Professor, Psychology and Neuroscience, Universityof Oregon. The Effects of Experience on Human Brain Development.April 5, 2002.Dr. Neville reviewed current knowledge about human brain devel-opment which has led her to the following conclusions:• The early childhood years lay a foundation that influences the effectiveness of all subsequent education efforts.• Public expenditures for early care and education must be in- vested in high quality programs that promote sustained relation- ships with qualified personnel.• Major investments must be made to enhance the skills and compensation of providers of early care and education.• Tax, wage, and income-support policies should be reassessed to assure that no child supported by a working adult lives in pov- erty.• Family and medical leave should be expanded to cover all work- ing parents, and strategies should be explored to provide income replacement.• The exemption period should be lengthened before states require parent of infants to work as part of welfare reform. 29
  31. 31. Appendix A continued Bobbie Weber, Coordinator, Oregon Child Care Research Partner- ship, Oregon State University, Childhood Care and Education in Oregon, April 5, 2002. Bobbie Weber described the current status of child care in Oregon including usage, affordability and initiatives to improve the quality of care available to families. She reported on research findings of the link between the level of quality and child outcomes. She concluded with an economic rationale for investment in child care. Suzanne Helburn, Professor of Economics Emerita, University of Colorado at Denver, Public Funding of Child Care, April 26, 2002. Suzanne Helburn reviewed research on quality child care. She then described an effective child care system, explored affordability, and concluded with a set of recommendations of policies which will improve market operation and provide incentives to increase quality. Louise Stoney, Consultant, Stoney Associates, and Technical Assis- tance Specialist, National Child Care Information Center, New York, It’s Not Just About Money: Financing the Early Care and Education System in Oregon, April 26, 2002. Louise Stoney based her comments on a set of key principles. She introduced the concept of layered funding, programs operating a single budget to which multiple funders have contributed. She distinguished between portable funding (given directly to parents and used in the program of their choice) and direct financing (fund- ing that directly supports a program). She noted that higher educa- tion and housing are models of how the two types of financing are combined. She argues that support of child care is an investment in young minds and in growing the economy. After sharing financing strategies being used in other states, Louise concluded with urging Oregonians to think outside the box.30
  32. 32. Appendix A continuedBobbie Weber, Coordinator, Oregon Child Care Research Partner-ship, Oregon State University, Oregon Child Care Policy Overview,April 26, 2002.Bobbie Weber provided basic information on Oregon’s child caresystem. She shared a brief history of child care regulation, an over-view of child care subsidy policy, and a summary of child carerelated tax credits.Arthur Emlen, Professor Emeritus in Social Work, Portland StateUniversity, Balancing Supply and Demand Initiatives, May 10, 2002.Arthur Emlen noted that most social problems can be addressed byeither a supply or a demand strategy and that there is a danger intaking an either-or position. Dr. Emlen argued that in addressingchild care we are best served by focusing on supporting both supply(child care providers) and demand (parents and children). Heshared examples of demand-side initiatives and concluded withcautions about trying to use public money to restrict parent choice.He argued that subsidy powers, regulatory powers, and educationalprograms be kept independent.Anne Mitchell, Early Childhood Policy Research, High Quality EarlyCare & Education, May 29, 2002.Anne Mitchell provided a graphic description of “A model forQuality Improvement” which includes quality standards, consumerengagement, provider engagement, support to providers to meetstandards, infrastructure to maintain quality standards, and ongoingfinancial assistance. Anne shared criteria for evaluating financingstrategies. 31
  33. 33. Appendix B: Citations Oregon Head Start Collaboration Project. (1999, March). Essential Elements of Programs for Children: Implementation Plan for Quality. Salem, OR: Oregon Department of Education. Oregon Childhood Care and Education Data Project. (2002). Data for Community Planning: 2000 Oregon Population Estimates and Survey Findings. Albany, OR: Linn-Benton Community College. Vandell, D., & Wolfe, B. (2000). Child Care Quality: Does It Matter and Does It Need to Be Improved? Washington DC: Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services. Retrieved June, 2001 from http:// aspe.hhs.gov/hsp/ccquality00/index.htm. National Research council and Institute of Medicine (2000). From Neurons to Neighborhoods: The Science of Early Childhood Development. Committee on Integrating the Science of Early Childhood Dvelopment. Jack P. Shonoff and Deborah A. Phillips, EdS. Board of Children, Youth and Camilies, Commission on Behavioral and Social Sciences and Education. Washington, D.C.: National Academy Press.32
  34. 34. OCCCOregon Commission for Child CareOregon Commission for Child CareEmployment Department875 Union Street NESalem, OR 97311(503) 947-1891www.emp.state.or.us/occc/